PERG 8.23 Regulated activities

Under section 19 of the Act (The general prohibition) no person may, by way of business, carry on a regulated activity in the United Kingdom unless he is authorised or exempt. The meaning of regulated activity is set out in Part II of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (the Regulated Activities Order) (as amended). Any person who breaches section 19 of the Act commits a criminal offence for which the maximum penalty is two years’ imprisonment and an unlimited fine.

Anyone who is carrying on a regulated activity is likely to make financial promotions in the course of or for the purposes of carrying on that activity. It is beyond the scope of this guidance to cover regulated activities as such (for a general guide see PERG 2). There are circumstances, however, where persons whose main aim is either:

1. (1)

   to make financial promotions for their own purposes or on behalf of others; or

2. (2)

   to help other persons to make financial promotions;

may find themselves conducting regulated activities. Such persons may typically include publishers or broadcasters, financial commentators, Internet service providers and website operators and telephone marketing companies.

The regulated activities which are likely to be conducted in the circumstances referred to in PERG 8.23.2 G are:

1. (1)

   giving advice on certain investments (articles 53 (Advising on investments), 53A (Advising on regulated mortgage contracts), 53B (Advising on regulated home reversion plans), 53C (Advising on regulated home purchase plans), 53D (Advising on regulated sale and rent back agreements)2 and 56 (Advice on syndicate participation at Lloyd’s) of the Regulated Activities Order) - for example, where the financial promotion is the advice;1

2. (2)

   making arrangements with a view to transactions in investments (article 25(21) of the Regulated Activities Order (Arranging deals in investments));1

   11
3. (2A)

   making arrangements with a view to regulated mortgage contracts (article 25A(2) of the Regulated Activities Order (Arranging regulated mortgage contracts);1

4. (2B)

   making arrangements with a view to a home reversion plan (article 25B(2) of the Regulated Activities Order (Arranging regulated home reversion plans);1

5. (2C)

   making arrangements with a view to a home purchase plan (article 25C(2) of the Regulated Activities Order (Arranging regulated home purchase plans));21

6. (2D)

   making arrangements with a view to a regulated sale and rent back agreement (article 25E(2) of the Regulated Activities Order (Arranging regulated sale and rent back agreements)); and2

7. (3)

   agreeing to carry on either (1) or (2) (article 64 of the Regulated Activities Order (Agreeing to carry on specified kinds of activity)).

The guidance that follows is concerned with the regulated activities of making arrangements with a view to transactions in investments1and advising on investments (except P2P agreements)5. Guidance on the regulated activities of making arrangements with a view to regulated mortgage contracts1and advising on regulated mortgage contracts is in PERG 4 (Guidance on regulated activities1 connected with mortgages). Guidance on the regulated activities of making arrangements with a view to a home reversion plan and advising on a home reversion plan,2making arrangements with a view to a home purchase plan and advising on a home purchase plan, and making arrangements with a view to a regulated sale and rent back agreement and advising on a regulated sale and rent back agreement2 is in PERG 14 (Guidance on home reversion, home purchase and sale and rent back 2activities).1

3As explained inPERG 1.2.3AG, where the guidance that follows uses the defined term advising on investments, this term should be read as referring only to the regulated activity (in article 53(1) of the Regulated Activities Order) of advising on investments (except P2P agreements). Related text should be construed accordingly.

4 Guidance on the distinction between controlled claims management activity and regulated claims management activity can be found at PERG 8.7A.5G to PERG 8.7A.7G.